Enlightening video. I believe Hudson has the momentum to write a sound theory due to his experience, study of history, and his passion to grow the American Economy. This is Economics speech equivalent of Morpheus's talk to Neo: "the splinter in your mind". Final Review: 5 out of 5 stars.

Would love to see more case studies on how efficient an economy can be if we had Industrialized Banking. Sapient Global Consulting, an innovation and technology company, has created a report regarding Industrial Banking back in August 2013:

Since the Civil War, investment banks have survived and thrived as global banks, boutique shops and regional players. The financial crisis shook investment banks to the core and showcased that the existing model no longer operated efficiently or adequately compensated shareholders for risk. Well-established and respected institutions, such as Lehman Brothers, a one-hundred-year-old bank, and Bear Stearns, an eighty-year-old firm, collapsed. To survive, other investment banks, such as Morgan Stanley and Goldman Sachs, converted to bank holding companies. Regulations became the driving force, and with that came the burden of higher government oversight and increased scrutiny on operations. To maintain solvency, banks received billions in tax payer dollars and the Troubled Asset Relief Program (TARP) put in over $700 billion to stabilize the economy. Its goal was to overhaul the financial system, resuscitate the economy, and improve risk management within organizations. Unfortunately, the economy continued to stagger, and investment banks shut down products facing increased regulatory scrutiny, such as commodities trading, in order to survive the crisis.

...

Similar to the automobile industry in the 1950s, investment banks must deal with unprecedented change and enable transformation at the core. Faced with a lower than optimal return on equity in some asset classes, banks have either curtailed trading in those areas or exited them altogether. The loss of these revenue streams, coupled with multiple challenges, such as regulatory compliance and capital requirements around risk-weighted assets, are forcing firms to seek cost savings and efficiencies wherever possible in a drive to increase the return of equity for the shareholders. Forward-thinking firms will lead the industrialization of the financial industry by leveraging a factory model that encompasses processes, technology and people to build profitable, cost-effective organizations. Firms that do will be best equipped to bolster innovation, uncover new products and grow their client base.

The fact that the British was afraid that Germany was going to win a few world wars on this banking model also provides support for its efficiency.

He makes claims regarding the Economy that armchair financial analyst's can confirm. For example, he stated from 2008 to 2016, most of the "growth" occurred for the top 5% while for the other 95% the economy shrunk. The US financial system is overgrown, parasitic, and turned into a transfer system of America's wealth. He supports this fact with a simple observation breakdown on where paycheck money is going:

~40% go to Mortgage / Home / Rent leaving around ~60-70% is actually disposable income (income remaining after deduction of taxes and other mandatory charges)~60% go to auto debt, credit card debt, school debt, food

The GDP driver being the 1% gets the 99% into debt. Hudson mentioned that most workers have "Traumatized worker syndrome", that they are afraid to strike because of debt payments. I believe this is true.

Hudson mentions that in 2004, the FBI claimed they had "The Greatest Wave of Financial Fraud in America's History" and resources to investigate crimes were hampered by the Patriot Act. Here is an excerpt from the FBI's Financial Institution Fraud and Failure Report 2004:

For Fiscal Year (FY) 2004Ending September 30, 2004[/b]

Criminal activity has become more complex and loan frauds are expanding to multi-transactional frauds involving groups of people from top management to industry professionals who assist in the loan application process. These professionals include loan brokers, appraisers, accountants, and real estate attorneys. Such transactions are sometimes hidden against a backdrop of genuine transactions which give them an appearance of legitimacy. Due to the complexity of these crimes, more FIF investigations are being initiated than ever before. These cases target large-scale fraud operations, often involving hundreds of subjects in multiple jurisdictions.https://www.fbi.gov/stats-services/publications/fiff_04

The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime, which has taken on urgent importance in recent weeks because of the nation’s economic woes.

Last edited by Royal on Wed Nov 15, 2017 9:17 pm, edited 3 times in total.

Wed Nov 15, 2017 9:05 pm

Royal

Joined: Mon Apr 11, 2011 6:55 pmPosts: 6521

Re: Mike Hudson on junk economics

I think everyone remembers 2007-2008. What is a bailout again? oh, that's right (whole other topic).

Additionally, Hudson says historically real wealth is gained through capital gains, specifically land value gains due to the lower tax rates. I would infer this is another component of the class battle as those only with disposable income and savings have a means of gaining more land or property in areas that can rise in value.

He brings up some history of Greece/Rome circulating around 750 BC (Which appears to be a very another interesting topic regarding the sustainability of civilizations).

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